Reddit, Inc. (NYSE: RDDT) Faces Lawsuit Over Misleading Business Operations and Reduced Traffic to Website

Rosen Law Firm is investigating a class action lawsuit against Reddit, Inc. (NYSE: RDDT) for allegedly misleading investors about its business operations. The lawsuit claims that defendants failed to disclose changes in Google Search's algorithm and features, causing users to stop their queries on Google search, which reduced traffic to Reddit. Shareholders who wish to serve as lead plaintiff must file motions by August 18, 2025.

Rosen Law Firm, a global investor rights law firm, has announced an investigation into a class action lawsuit against Reddit, Inc. (NYSE: RDDT) for allegedly misleading investors about its business operations. The lawsuit, filed on behalf of purchasers and acquirers of Reddit securities between October 29, 2024, and May 20, 2025, alleges that the company made false and misleading statements and failed to disclose significant changes in Google Search's algorithm and features.

According to the complaint, Reddit did not disclose that changes in Google's search algorithm and AI features, such as AI Overview, were causing users to stop their queries on Google Search, thereby reducing traffic to the Reddit platform. The lawsuit also claims that Reddit was aware of this impact but failed to disclose it to investors, leading to a dramatic reduction in user traffic and advertising revenues.

The lawsuit further alleges that Reddit lacked a reasonable basis for its outlook on user growth and advertising revenues, which negatively impacted investors. The class action seeks to recover damages suffered by shareholders as a result of these alleged misrepresentations.

Shareholders who wish to serve as lead plaintiff for the class must file their motions with the court by August 18, 2025. Rosen Law Firm is encouraging shareholders who suffered losses in excess of $100,000 to contact the firm for information about their rights.

Rosen Law Firm is known for its expertise in shareholder rights litigation and has recovered over $1 billion for shareholders since its inception. The firm is committed to helping shareholders recover losses and holding company executives accountable for their wrongdoing.

References:
[1] https://www.businesswire.com/news/home/20250816848397/en/RDDT-Deadline-Rosen-Law-Firm-Urges-Reddit-Inc.-NYSE-RDDT-Stockholders-with-Losses-in-Excess-of-%24100K-to-Contact-the-Firm-for-Information-About-Their-Rights
[2] https://www.marketscreener.com/news/pomerantz-law-firm-reminds-investors-with-losses-on-their-investment-in-reddit-inc-of-class-action-ce7c51dfda8af12d
[3] https://www.marketscreener.com/news/rddt-shareholders-have-the-right-to-lead-the-reddit-inc-securities-lawsuit-contact-the-djs-law-g-ce7c5ed2dd8df622
[4] https://www.prnewswire.com/news-releases/investor-alert-pomerantz-law-firm-reminds-investors-with-losses-on-their-investment-in-reddit-inc-of-class-action-lawsuit-and-upcoming-deadlines---rddt-302527391.html